McDonald's warns of continuing sales drop

McDonald's said yesterday that a global sales figure declined in the first quarter and warned that it was expected to dip in April as well.

McDonald’s said yesterday that a global sales figure declined in the first quarter and warned that it was expected to dip in April as well.

The last time the quarterly sales figure declined was a decade ago, in early 2003, according to the company. A monthly sales figure also fell for the first time in nearly a decade late last year.

McDonald’s Corp., based in Oak Brook, Ill., has been struggling to boost sales amid intensifying competition, changing eating habits and challenging economic conditions around the world.

The company has responded by renewing its focus on value and rolling out new menu items, such as chicken wraps, that are more in line with the fresher, healthier food people are increasingly searching for.

For the quarter, McDonald’s said global sales at restaurants open at least 13 months fell

1 percent. That included a

1.2 percent drop in the U.S. where it has been trying to boost sales by touting its Dollar Menu, a strategy that analysts warn could eat away at profit margins. Despite the drop, McDonald’s said it increased its market share.

The sales figure fell 1.1 percent in Europe, the company’s biggest region by sales. It fell

3.3 percent in the region encompassing Asia, the Middle East and Africa, reflecting weakness in Japan and negative results in China.

For the quarter, McDonald’s Corp. earned $1.27 billion, or $1.26 per share. That compares with $1.266 billion, or $1.23 per share, a year ago.

Revenue edged up 1 percent to $6.6 billion.

Analysts expected a profit of $1.26 per share on revenue of $6.59 billion, according to FactSet.

General Electric

General Electric Corp. earnings rose in the first quarter on rising profit from selling aircraft engines and transportation equipment and the sale of NBC. But results were held back by economic conditions in Europe that were even worse than expected.

GE reported net income of $3.5 billion, or 34 cents per share, on revenue of $35 billion. During last year’s first quarter, GE earned $3 billion, or 29 cents per share, on $35.2 billion in revenue.

GE CEO Jeff Immelt said operations in emerging markets and the U.S. performed as expected. But Europe, which was expected to be bad, worsened. Revenue in the region fell 17 percent, Immelt said.

Kimberly-Clark

Kimberly-Clark Corp. posted a bigger-than-expected jump in first-quarter earnings and raised its forecast for the year yesterday as the maker of Kleenex tissues got a boost from a severe flu season and a rival’s supply problems.

Kimberly-Clark, whose shares hit an all-time closing high of $106.10 yesterday, sold more of its Cottonelle toilet paper in the first quarter partly because of a supply problem at Georgia Pacific, which makes Angel Soft and Quilted Northern toilet paper.

Privately held Georgia Pacific said yesterday that the problem occurred at its Arkansas and Louisiana plants as they implemented $500 million in new paper-making technology. It said the glitch is having a short-term impact on its supply of Quilted Northern toilet paper.

Excluding items such as restructuring costs, Kimberly-Clark earned $1.48 per share, well ahead of the analysts’ average forecast of $1.34.

Net income rose to $531 million, or $1.36 per share, from $468 million, or $1.18 per share, a year earlier.